Vol. 014: Seven Questions, One Week

Current Conditions

We reviewed our preliminary due diligence work across dozens of development sites in North Carolina over the past 10 months. Each site was evaluated before the developer committed capital, at the letter of intent or early contract stage. The scope was the same every time: answer the questions that determine whether the deal works before the deal is signed.

The findings are not site-specific. They’re pattern-specific. Across all evaluations, the same categories of information determined deal viability. And in nearly every case, the critical information was available in the first week: from public records, published fee schedules, and political meeting transcripts.

The question is not whether this information exists. It does. The question is whether anyone looks for it before capital is committed.

Signals Observed

Signal 1: Environmental features reduced buildable area by 15-30% on nearly 1 in 5 sites, and the constraint was discoverable before the survey.

On four of the sites we evaluated, streams, floodplain, or watershed overlay districts reduced the buildable area significantly beyond what the topographic survey suggested. In one case, a jurisdictional stream bisecting the property required a U.S. Army Corps of Engineers determination that added an estimated 6 months to the entitlement timeline before any municipal review could begin.

These features are mapped. Watershed overlays are published in the zoning code. FEMA floodplain data is publicly available. Wetland indicators are visible on aerial photography and the National Wetlands Inventory. In every case, the constraint was identifiable in the first week through desktop analysis. In every case, the developer had not identified it at the LOI stage.

The cost of discovering a 25% buildable area reduction after the survey is ordered is the survey. The cost of discovering it after engineering is engaged is the survey plus the engineering. The cost of discovering it after the application is filed is everything.

Signal 2: The zoning code permitted the use, but the board didn’t, and the record said so.

On two sites, the proposed product type was permitted in the existing zoning district. The code analysis was clean. A developer reading only the code would conclude: no rezoning required, straightforward site plan approval.

The political record told a different story. In both cases, the board had denied the last two or three similar applications in the same district. The objections were specific, documented, and consistent across hearings. The zoning code permitted the use. The board did not. That gap, between what the code allows and what the board will approve, is invisible in a code-only analysis and clearly visible in the meeting transcripts.

Signal 3: Fee variance within the same metro area produced six-figure cost differences on comparable projects.

Across the sites we evaluated, fee schedules ranged from approximately $250 for a rezoning application in a rural county to over $5,100 in a nearby urban jurisdiction: before impact fees, transportation fees, or utility connection charges. Two sites 20 miles apart carried total entitlement fee differentials exceeding $100,000 on the same product type.

Fee schedules are public documents. Most municipalities publish them online. Yet fee burden was consistently one of the last items developers evaluated, often after the site was under contract and the proforma was already drafted. Adjusting the proforma after the fee schedule is known is possible. Adjusting the purchase price after the contract is signed is harder.

Signal 4: Timing windows are real, short-lived, and visible to anyone watching.

On one site, the municipality was mid-UDO rewrite. The project could be filed under the old provisions, which were more flexible for the proposed product type, with the ability to negotiate conditions under either the old or new framework. That timing advantage had an estimated 90-day shelf life. Once the new UDO was adopted, the flexibility disappeared.

On another site, a newly elected board member had made public statements supportive of the proposed product type during the campaign. Filing early in their term, before political capital was spent on other issues, offered a window that would not exist 18 months later.

Both timing advantages were identifiable from public information: the UDO adoption schedule and the election results. Neither was reflected in the developer’s standard due diligence process.

Forecast

The seven questions that determine deal viability (zoning reality, environmental constraints, political record, process timeline, fee burden, staff disposition, and board voting patterns) are answerable from public records within one week of identifying a site. Most land teams answer two or three of them at the LOI stage. The other four or five are discovered during the entitlement process, when the cost of a bad answer has already been committed.

This pattern will not self-correct. Land teams are capacity-constrained. The LOI stage is compressed. The incentive is to get the site under contract before a competitor does, not to answer every question before signing. The result is a structural underinvestment in pre-application intelligence that shows up as timeline risk, cost overruns, and occasional deal death.

The developers who consistently answer all seven questions before committing capital will not win every deal. But they will avoid the deals that were never going to work, and that avoidance, compounded across a portfolio, is worth more than the deals they win.

Watch Items

• UDO rewrites in progress. At least two municipalities in the central NC market are in active code rewrite processes. Transition periods create timing windows that favor prepared applicants and penalize late ones.
• FEMA map revisions. Flood Insurance Rate Map updates are in process for several watersheds. Properties currently outside the floodplain may be reclassified, changing buildable area calculations and insurance requirements.
• Fee schedule updates. Multiple municipalities have adopted fee escalation schedules with increases of 40-90% over the next 3-5 years. The fee burden at the time of proforma is not the fee burden at the time of permitting.
• Municipal elections. Board composition is the single highest-variance input to entitlement outcomes. Every election cycle reshuffles the probability distribution on every pending and future application. The election results are public. The voting records that follow are public. Neither requires insider access.

Confidence Level

High. Based on 25+ site evaluations with consistent patterns across municipalities, product types, and developer profiles. Environmental constraint identification, fee schedule analysis, and political record review are all based on published public data. The “first week” timeframe is operational, not aspirational, we’ve done it repeatedly.

Why This Matters

The cost of answering seven questions in the first week of evaluating a site is less than one month of carry on a typical land contract. The cost of not answering them is discovering in month 6 that the site has a constraint that was knowable on day 1.

A jurisdictional stream that adds 6 months to the timeline. A board that has denied the last three similar cases. A fee schedule that adds $100,000 to the proforma. A UDO rewrite that closes a flexibility window in 90 days. All of this information is public. All of it is available in the first week. None of it requires insider knowledge or special access.

The most expensive due diligence is the kind you do after you’ve already committed capital. The cheapest kind is the kind you do before. The difference between the two is not sophistication or technology. It’s sequence: asking the right questions before signing, not after.